Chapter 24 Flashcards
Classical economists
Believe that business cycles (ups and downs of the economy) are temporary glitches and generally favor laissez-faire, or non activist, policies
Laissez-faire
Leave the market alone
Aggregate
Total, sum of, amounting to
Laypeople
Average citizens
Keynesian economists
Believe business cycles reflect underlying problems that can be addressed with activist government policies
Long run framework
Issues of growth
Short run framework
Business cycles
Both short run and long run frameworks
Unemployment and inflation
Long run growth framework definition
Focuses on incentives for supply sometimes called supply side economics
Short run framework definition
Focus on demand demand side economics
Per capita output
Output divided by the total population
Recession
Decline in real output that persists for more than two consecutive quarters of a year
Bottom of recession or depression
Trough
Upturn
Total output begins to expand and the economy comes out of the trough
A depression
A deep and prolonged recession
